Sonoma County readies for Obamacare this week

Gina Belforte, owner of a Stanley Steemer cleaning business in Santa Rosa, finds staying current on health care law changes challenging and confusing. Hocker has declined his employer's health care and plans on opting for Obamacare. (Christopher Chung/ The Press Democrat)

BY MARTIN ESPINOZA AND JEREMY HAY

THE PRESS DEMOCRAT

September 28, 2013, 6:19PM

09/28/2013

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The most ambitious and sweeping social legislation in a half-century moves into its final stage Tuesday, as enrollment opens at the state-run consumer marketplaces that are central to President Barack Obama's campaign to remake the nation's health insurance system.

Hiccups virtually are assured as tens of millions of people try to understand and comply with new rules and bureaucracies. But undoubtedly, once new insurance policies begin Jan. 1, the process already will have brought about dramatic changes.

"This is revolutionary. This law is going to change everything about health insurance in the United States," said consultant Bob Aita of Aita & Associates Insurance Marketing in Sebastopol.

The keystone of the law commonly called Obamacare — fondly by its fans, pejoratively by its critics — is that nearly everyone will be required to have insurance or else pay a penalty. And it provides a range of subsidies to help many people pay for coverage.

That means a huge change in circumstances for about 10 percent of Sonoma County's population: 50,000 people who are now uninsured and who, for the most part, are considered the law's biggest winners. The roughly 20,000 undocumented immigrants in the county are not eligible for coverage.

For those eligible, the impact of the Affordable Care Act is that they will be required to get insurance — but they also will have greater access to health insurance and in ways they didn't have before.

Access to Medi-Cal, the insurance plan for low-income people, will broaden as the upper income limit is raised. As it stands, only people earning at or below the federal poverty level are eligible. The new upper limit will be 138 percent of the poverty line.

Others without insurance who earn too much to qualify for Medi-Cal will be offered a sliding-scale subsidy pegged to their income to help make insurance affordable as long as they purchase it through the state's health insurance marketplace.

"The access to the insurance is access to care," said Rita Scardaci, director of the county's Department of Health Services. "It really is an exciting opportunity for us to move as a community toward being healthier."

Meanwhile, those above the income cutoff of four times the poverty level — which annually for a single adult would be $46,000 and $94,200 for a family of four — will not qualify for a subsidy, but nonetheless will face a penalty unless they get insurance.

Things will change less for people who already are insured, especially those who get coverage through their employer. But even for them, the world of health insurance will be remade as big shifts take place, some of which already have begun to kick in.

Some of those include:

Beginning next year, insurers will no longer be able to use someone's pre-existing health conditions, including mental illness, as a reason to deny them health insurance. Children have had this benefit since Obamacare's first year in 2010.

Insurance policies will be required to include "minimum essential benefits" ranging from pediatric care to emergency services to psychiatric treatment and prescription drug coverage.

Policies that include dependents already are required to cover adult children until age 26.

Older people might pay less for their insurance; younger people might pay more.

Out-of-pocket expenses are capped and lifetime and yearly dollar limits on coverage of essential health benefits are eliminated.

But, just days before enrollment begins, despite months of publicity and public education campaigns, many questions remain about who is to be affected and how. Insurance brokers and other experts still are trying to divine the fine print. And for most consumers, the task is that much harder.

For months, poll after poll has suggested that Americans are confused about the Affordable Care Act and how it will affect them. In a national employer and employee open enrollment survey conducted this summer for insurer Aflac, 69 percent of workers said their employer had yet to tell them about changes coming to their benefits package due to Obamacare. The health care law requires employers to inform their workers of their coverage options by Tuesday.

Thirty-seven percent of the workers surveyed thought Obamacare would make it more difficult to understand their health care policies, and 60 percent had not begun to educate themselves about how the new law will affect their benefits package.

Les Heinsen, state sales coordinator for Aflac, said the role of the insurance broker and agent will become crucial after Tuesday. Heinsen said Aflac has about 700 insurance accounts in Sonoma County. Most of these are businesses with fewer than 50 employees.

"It is definitely a changing time," Heinsen said. "Actually, it's a very exciting time for us to be able to help those employers."

Even those who are no strangers to the workings of government are having difficulty understanding the new law.

"It is very far-reaching and it is very confusing," said Gina Belforte, a Rohnert Park councilwoman who owns a Stanley Steemer cleaning business in Santa Rosa. She has been holding weekly meetings to talk with employees about the changes.

Belforte, who has about 20 employees and offers insurance to some, falls into the category of a small business owner for whom some things change under the new law and others don't.

Employers with more than 50 employees have been exempted for a year from a key mandate of the new law: that they provide coverage for employees or pay a penalty. But the landscape for smaller businesses, which are not required to provide insurance, is somewhat more complex.

Businesses like Belforte's have options if they want to offer insurance coverage and they enjoy a variety of incentives to do so.

Companies that already offer health insurance face the prospect that after Jan. 1, some of the plans they can afford now will be less rich in benefits, or more expensive, or both. Local brokers are reporting that insurance companies are telling them the cost of many plans likely will increase next year, in some cases dramatically.

But some businesses, depending on their size and the average wage of their employees, may be eligible for a range of tax credits.

The more businesses that offer insurance, said Scardaci, the more productive they will be as their employees stay healthier.

Many in the business community are far more skeptical. Some owners of businesses with more than 50 employees, which will be required to provide insurance starting in 2015, say it will cost them dearly, to the point that layoffs are likely.

David Hodges, a Santa Rosa health insurance broker, said there will be winners and losers.

The winners include those who are uninsured or underinsured with bare-bones policies, as well as people with pre-existing conditions not covered by group insurance; young people between the ages of 26 and 30 who can get low-cost catastrophic insurance; and anyone who makes less than 138 percent of the poverty line.

The losers, Hodges said, will be individuals who earn too much to get insurance premium assistance. Employee out-of-pocket expenses will increase on most plans and employers will have to insure new hires more quickly than before.

One thing is clear about the law, said Mike Parr, employee benefits consultant at George Petersen Insurance in Santa Rosa: "It's different. Will it be better or worse? I don't know."

The most ambitious and sweeping social legislation in a half-century moves into its final stage Tuesday, as enrollment opens at the state-run consumer marketplaces that are central to President Barack Obama's campaign to remake the nation's health insurance system.

Hiccups virtually are assured as tens of millions of people try to understand and comply with new rules and bureaucracies. But undoubtedly, once new insurance policies begin Jan. 1, the process already will have brought about dramatic changes.

"This is revolutionary. This law is going to change everything about health insurance in the United States," said consultant Bob Aita of Aita & Associates Insurance Marketing in Sebastopol.

The keystone of the law commonly called Obamacare — fondly by its fans, pejoratively by its critics — is that nearly everyone will be required to have insurance or else pay a penalty. And it provides a range of subsidies to help many people pay for coverage.

That means a huge change in circumstances for about 10 percent of Sonoma County's population: 50,000 people who are now uninsured and who, for the most part, are considered the law's biggest winners. The roughly 20,000 undocumented immigrants in the county are not eligible for coverage.

For those eligible, the impact of the Affordable Care Act is that they will be required to get insurance — but they also will have greater access to health insurance and in ways they didn't have before.

Access to Medi-Cal, the insurance plan for low-income people, will broaden as the upper income limit is raised. As it stands, only people earning at or below the federal poverty level are eligible. The new upper limit will be 138 percent of the poverty line.

Others without insurance who earn too much to qualify for Medi-Cal will be offered a sliding-scale subsidy pegged to their income to help make insurance affordable as long as they purchase it through the state's health insurance marketplace.

"The access to the insurance is access to care," said Rita Scardaci, director of the county's Department of Health Services. "It really is an exciting opportunity for us to move as a community toward being healthier."

Meanwhile, those above the income cutoff of four times the poverty level — which annually for a single adult would be $46,000 and $94,200 for a family of four — will not qualify for a subsidy, but nonetheless will face a penalty unless they get insurance.

Things will change less for people who already are insured, especially those who get coverage through their employer. But even for them, the world of health insurance will be remade as big shifts take place, some of which already have begun to kick in.

Some of those include:

Beginning next year, insurers will no longer be able to use someone's pre-existing health conditions, including mental illness, as a reason to deny them health insurance. Children have had this benefit since Obamacare's first year in 2010.

Insurance policies will be required to include "minimum essential benefits" ranging from pediatric care to emergency services to psychiatric treatment and prescription drug coverage.

Policies that include dependents already are required to cover adult children until age 26.

Older people might pay less for their insurance; younger people might pay more.

Out-of-pocket expenses are capped and lifetime and yearly dollar limits on coverage of essential health benefits are eliminated.

But, just days before enrollment begins, despite months of publicity and public education campaigns, many questions remain about who is to be affected and how. Insurance brokers and other experts still are trying to divine the fine print. And for most consumers, the task is that much harder.

For months, poll after poll has suggested that Americans are confused about the Affordable Care Act and how it will affect them. In a national employer and employee open enrollment survey conducted this summer for insurer Aflac, 69 percent of workers said their employer had yet to tell them about changes coming to their benefits package due to Obamacare. The health care law requires employers to inform their workers of their coverage options by Tuesday.

Thirty-seven percent of the workers surveyed thought Obamacare would make it more difficult to understand their health care policies, and 60 percent had not begun to educate themselves about how the new law will affect their benefits package.

Les Heinsen, state sales coordinator for Aflac, said the role of the insurance broker and agent will become crucial after Tuesday. Heinsen said Aflac has about 700 insurance accounts in Sonoma County. Most of these are businesses with fewer than 50 employees.

"It is definitely a changing time," Heinsen said. "Actually, it's a very exciting time for us to be able to help those employers."

Even those who are no strangers to the workings of government are having difficulty understanding the new law.

"It is very far-reaching and it is very confusing," said Gina Belforte, a Rohnert Park councilwoman who owns a Stanley Steemer cleaning business in Santa Rosa. She has been holding weekly meetings to talk with employees about the changes.

Belforte, who has about 20 employees and offers insurance to some, falls into the category of a small business owner for whom some things change under the new law and others don't.

Employers with more than 50 employees have been exempted for a year from a key mandate of the new law: that they provide coverage for employees or pay a penalty. But the landscape for smaller businesses, which are not required to provide insurance, is somewhat more complex.

Businesses like Belforte's have options if they want to offer insurance coverage and they enjoy a variety of incentives to do so.

Companies that already offer health insurance face the prospect that after Jan. 1, some of the plans they can afford now will be less rich in benefits, or more expensive, or both. Local brokers are reporting that insurance companies are telling them the cost of many plans likely will increase next year, in some cases dramatically.

But some businesses, depending on their size and the average wage of their employees, may be eligible for a range of tax credits.

The more businesses that offer insurance, said Scardaci, the more productive they will be as their employees stay healthier.

Many in the business community are far more skeptical. Some owners of businesses with more than 50 employees, which will be required to provide insurance starting in 2015, say it will cost them dearly, to the point that layoffs are likely.

David Hodges, a Santa Rosa health insurance broker, said there will be winners and losers.

The winners include those who are uninsured or underinsured with bare-bones policies, as well as people with pre-existing conditions not covered by group insurance; young people between the ages of 26 and 30 who can get low-cost catastrophic insurance; and anyone who makes less than 138 percent of the poverty line.

The losers, Hodges said, will be individuals who earn too much to get insurance premium assistance. Employee out-of-pocket expenses will increase on most plans and employers will have to insure new hires more quickly than before.

One thing is clear about the law, said Mike Parr, employee benefits consultant at George Petersen Insurance in Santa Rosa: "It's different. Will it be better or worse? I don't know."